Federal Government Taxation

Federal Government Taxation

The overwhelming majority of the federal government’s revenue is collected as payroll taxes. Payroll taxes, which are collected by employers through deductions from workers’ paychecks, include individual income taxes and social insurance (i.e., Social Security) taxes. The largest source of revenue for the federal government is the individual income tax. Individual income taxes comprise almost half of all revenue for the federal government. Social insurance taxes are more than a third of all revenue for the federal government. Corporate income taxes provide about a tenth of all revenue for the federal government. The “other taxes” category includes excise taxes, tariffs and customs duties, and other fees collected by the federal government.

U.S. Federal Government Revenues by Category
(Billions of dollars)
Fiscal Year
Total Receipts
Individual Income Taxes
Corporation Income Taxes
Social Insurance Receipts
Other Receipts
2006
estimates
2,177.6
966.9
220.3
818.8
171.6
2005
estimates
2,052.8
893.7
226.5
773.7
158.9
2004
1,880.1
809.0
189.4
733.4
148.3
2003
1,782.3
793.7
131.8
713.0
143.9
2002
1,853.2
858.3
148.0
700.8
146.0
2001
1,991.2
994.3
151.1
694.0
151.8
2000
2,025.2
1,004.5
207.3
652.9
160.6
1999
1,827.5
879.5
184.7
611.8
151.5
1998
1,721.8
828.6
188.7
571.8
132.7
1997
1,579.3
737.5
182.3
539.4
120.2
1996
1,453.1
656.4
171.8
509.4
115.4
1995
1,351.8
590.2
157.0
484.5
120.1
Source: Economic Report of the President, Feb. 2005